I want to become a lender on prosper. how does it work? -

i want to earn about 20 percent. what happens if one person fails to pay off his loan what happens with my money? also how does it work lets say if i lend 100 dollars at 20 perecnt 3 yr loan would i be getting 4 dollars sent to my checking account everymonth? or does it go to my prosper account and i have to transfer it?|::::|You can t do anything at the moment. Prosper didn t fully understand the legal ramefications of what they were doing and are currently in a quot;quiet periodquot; until they get SEC approval to continue. The quiet period will probably last another 4 months. As for earning 20%, you won t. To get a 20% or higher interest rate, you have to loan to people with C or lower credit ratings. These people have these credit ratings for a reason. By the end of 1 year, 40% will have defaulted on their loan. By the end of 3 years, more than half will have defaulted. If you only have 1 loan, if it defaults, you lose all of your money. Here s the legendary case. He lent to Es at 20%. Cumulatively, he s lost 20% of his money. That s because $250K of his loans defaulted. At $3000 a year against other income, it will be 80 years before he uses up his losses. http://www.lendingstats.com/lenders/Mule... As for repayments, it s over 3 years. The $3.50 a month (your math is wrong and there are service fees) would go to your prosper account and you would periodically move it to your checking account.|::::|Prosper.com can be risky, and some here will tell you not to do it including me. I found this site about prosper (in defense of them). I am too one sided to answer your question. http://www.lazymanandmoney.com/in-defens... /